Long-term unemployment rose dramatically during the recent recession and remains elevated. A primary cause may be the fact that more workers with inherently low job finding rates have become unemployed. This would suggest that the natural rate of unemployment has increased, and that additional...

Long-term unemployment rose dramatically during the recent recession and remains elevated. In this essay, Richmond Fed vice president Andreas Hornstein and senior economist Thomas A. Lubik analyze the potential causes of this increase and explore various explanations of “duration...